Mid-Atlantic Health Law TOPICS

On February 2, 2000, the Maryland Health Services Cost Review Commission (HSCRC) accepted and adopted the report of the HSCRC's Hospital Rate Redesign Work Group. Such report, among other things, recommended the continuation of case rate targets as a means of moderating hospital charges. In other words, Maryland hospitals will continue to bill for each unit of service they deliver, provided that each hospital's average charge per case falls below an average case rate target set by the HSCRC for that hospital. If a hospital does not meet its average case rate target, then it must lower its unit rates.

The report also recommended that these average case rate targets be set so that all Maryland hospitals in the aggregate experience a 2% increase in inpatient rates for the year beginning July 1, 2000, and an increase in inpatient rates for the year beginning July 1, 2001 equal to local inflation.

The foregoing rate increases were conditioned, however, on Maryland's inpatient charges to Medicare not growing much faster than Medicare inpatient charges in the rest of the nation. Further, whether Maryland hospitals will receive another inflation increase for the year beginning July 1, 2002, will depend upon how Maryland hospital rates compare to the rest of the nation over the next two years.

The report also addressed potential administrative savings, and recommended that the HSCRC begin to collect data in regard to the volume of, and reasons for, the denial of hospital payments by payors. The HSCRC is also to pursue the development of a Web-based data interchange that would allow Maryland hospitals and payors to communicate with each other more efficiently.